Amazon Looks To Release Set-Top Box For Holiday Season, Sources Say

reg Bensinger was first with the news on Oct. 3 that Amazon.com is taking steps toward releasing a planned set-top box in time for the holiday selling season, according to people briefed on the company’s plans. The product, which would pit the online retailer against a host of established rivals, is a small device that resembles a Roku Inc. player and is similarly styled as a platform to run apps and content from a variety of sources, these people said.

Amazon.com Inc. is taking steps toward releasing a planned set-top box in time for the holiday selling season, according to people briefed on the company’s plans.

The product, which would pit the online retailer against a host of established rivals, is a small device that resembles a Roku Inc. player and is similarly styled as a platform to run apps and content from a variety of sources, these people said. It would also serve as a delivery vehicle for Amazon’s existing streaming video service–available as part of its Prime membership–which competes with Netflix Inc. and has been expanding lately.

Plans for a device that would stream video were reported in April by The Wall Street Journal and other media outlets. Such a set-top box would broaden Amazon’s reach into the living room, where today it is dependent on other hardware makers to reach consumers watching video on TV sets. Providing a device of its own is a potentially crucial component to Amazon’s ambition of expanding beyond its core online marketplace business.

Prior reports about Amazon’s plans have focused primarily on prospects for streaming its own content, which it now delivers to PCs and through other living room devices. But the company also plans to feature varied apps from other companies for streaming video and music, as well as some games, the people briefed on Amazon’s plans said.

In recent weeks, Amazon has approached a variety of media app developers, as well as cable television providers, seeking partnerships for the rollout of the set-top box, these people said. The Seattle-based retail giant has given some a deadline of mid-October to submit apps that could work with the device, the people said.

An Amazon spokesman declined to comment.

Amazon hasn’t made clear the intended release date of the set-top box, code-named “Cinnamon,” nor has it discussed possible pricing, these people said. Amazon Chief Executive Jeff Bezos has said he likes to sell devices, such as the Kindle Fire tablets, at close to the cost of manufacturing and to profit from the sale of services available through the hardware.

Roku sells its set-top devices for as little as $50, while Apple Inc. offers its Apple TV for $99. Such devices reach the Internet using Wi-Fi or Ethernet connections, through which video and music can be streamed to televisions. Subscriptions to streaming video or music services like Netflix Inc. and Pandora Media Inc., cost extra.

A key motivation for Amazon is boosting its Prime membership rolls, which may be bolstered by a set-top box. The $79-per-year service offers thousands of movies and television shows for streaming, as well as two-day shipping on many items and, analysts say, compels users to buy more goods through Amazon.

The company may offer a separate remote control for the set-top box, though it is likely to also be controlled through apps on smartphones and tablets, similar to the Apple TV set-top box, the people said. Earlier this month at Amazon headquarters, Mr. Bezos demonstrated features of the latest Kindle Fire which allow it function like a remote control, including sending streaming video to web-connected televisions.

A set-top box could be shelved or delayed due to financial, performance or other considerations, the people said.

Streaming video has been an increasing focus for Amazon, which has been racing to distinguish itself from rivals Netflix, Hulu LLC and others with exclusive content deals and a slate of television pilots that are set to become available starting later this year. That mirrors a similar strategy by Netflix which has won acclaim for its proprietary series, like “Orange Is the New Black” and “House of Cards,” which garnered an Emmy nod.

Based on the dizzying array of free and paid apps available on Roku devices–from the Yachting Channel to YogaGlo to Trigger Talk TV for gun enthusiasts–it is easy to imagine potential e-commerce tie-ins on an Amazon device. The two most-watched Roku apps are Netflix and Amazon Instant Video, according to Roku’s website.

Today, Amazon users can only stream content through specially equipped televisions, set-top boxes like those sold by Roku, or videogame systems such as Microsoft Corp.’s Xbox. With its own set-top box, Amazon would gain additional data about its customers as well attract exclusive apps.

“If Amazon can produce a box that will have a truly complete package of streaming sources, that would be very compelling,” said Michael Pachter, a Wedbush Securities analyst. “This fits into their vision of dominating the competition in every area.”

Mr. Pachter said Amazon shouldn’t face problems with content rights for its box, because the apps already work on Roku and other devices.

An Amazon set-top box would be entering a crowded field. Millions of televisions and gaming consoles already enable streaming video from Amazon and Roku, based in Saratoga, Calif., said it has sold at least 5 million devices in the U.S. Samsung Electronics Co. this year bought Boxee, a streaming television service, and Intel Corp. is working on its own video service and accompanying device.

Amazon has broad hardware ambitions, including at least two smartphones and an audio-only streaming device, people familiar with the company’s plans said earlier this year.

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